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Supreme Court rules on division of property for cohabitees

The Supreme Court has ruled on the correct approach to calculating beneficial interests in property where the legal title to the property is held in joint names by an unmarried couple but there is no express statement of how it is to be shared.

 

The case concerned Ms Jones and Mr Kernott, who met in 1981 and had two children together. In 1985 they purchased a house in their joint names. No declaration was made as to how the beneficial interest in the property was to be held. The mortgage and upkeep on the house was shared between them.

 

The relationship deteriorated and in 1993 Mr Kernott moved out. From that point onwards Ms Jones lived in the property with both children. In 1996 Mr Kernott bought his own house.

 

Over the years, the value of the original property increased and in 2006 Mr Kernott indicated that he wished to claim a beneficial share in it. In response, Ms Jones, in 2007, applied to the county court for a declaration that she owned the entire beneficial interest in the property. By 2008 the property was valued at £245,000.

 

The county court judge noted that the house was first purchased to set up a family home. It was bought in joint names and a presumption arose that they intended to jointly share the beneficial ownership of it as well. Up until 1993 there was no evidence to rebut that presumption. Ms Jones claimed however that in the 14 and a half years following there was evidence that their common intention had changed. Mr Kernott had ceased to make contributions towards the running of the house and had made only very limited contributions towards the support of their children. Furthermore it was mostly during that latter period that the value of the property had increased.

 

The judge held that their common intention had indeed changed. He held that once the initial presumption of joint beneficial ownership is displaced and there is no further clear evidence as to the division of shares in the property it falls upon the court to infer or impute an intention to the parties as to the division of the property that they, as reasonable and fair people, would have intended. He decided that Mr Kernott was entitled to only a 10% share.

 

The case was appealed to the High Court and the Court of Appeal before finally being heard in the Supreme Court, which restored the order of the county court.

 

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